africa Banking Economy Finance Government Mozambique

Mozambique wants World Bank for structural reforms with IMF as guarantor

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Mozambique’s finance minister Adriano Maleiane has said in an interview with Lusa that he wants the International Monetary Fund (IMF) to be “guarantor” of the country’s economic policy and needs institutions such as the World Bank to support structural reforms.

 

In Bali, Indonesia, where he was participating in the IMF and World Bank Annual Meetings, Minister Maleiane said that it was important for the IMF to assume the role of “guarantor” of the economic policies that are being pursued and to continue to “provide technical assistance”.

The minister explained that this aid should continue “in the field of resource mobilisation in the area of tax administration, and in the elaboration of projects”, so that the IMF could then convey the message that Mozambique was “on track”, especially after its progress in “successful fiscal consolidation and difficult measures such as the elimination of subsidies”.

That is, to “acknowledge the effort” and send the message to the markets that Mozambique “is on the right track”.

On the other hand, the Minister of Finance said programmes should be agreed with institutions such as the World Bank.

“We need a programme of structural reform, for example in the framework of the World Bank, and of other specialised institutions. We need this a lot,” he said, especially in terms of cinfrastructures, schools, education and roads.

The International Monetary Fund anticipates a rise in public debt in Mozambique over the next five years, from 112.9% in 2018 to 130.7% in 2022, before dropping to 122.1% in 2023.

According to the ‘Fiscal Monitor’, released on Wednesday in Bali, Mozambique’s public debt will increase in the next five years to 118.7% in the next year, and peak at 130.7% in 2022.

The average public debt in sub-Saharan Africa will stand at 41.7% this year, almost three times less than Mozambique’s anticipated indebtedness.

At the end of September, the financial rating agency Fitch reconfirmed Mozambique’s ‘default’ rating because of the government’s inability to reach agreement with creditors or pay public debt instalments.

Fitch anticipates growth of 3.5% for Mozambique this year, down from 3.7% last year, and a budget deficit of 5.7%. or 6.9% including arrears.

Source: Club Of Mozambique

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